-- Connecting the dots between our economy, government and business --
Comment: Note the remarks from JPMorgan’s Michael Cembalest, whose work we've written about often here. He said Illinois was one of two states where “deteriorations in pension finances … are practically irreversible.” In order to address its pension gap, Cembalest said the state would have to either increase tax revenues by 25 percent, increase public sector worker contributions by 689 percent or achieve an annual investment return equal to 11.5 percent.
Summary and audio linked here.
Chicago’s political leadership is floating a pension buyout program as evidence it is seriously addressing the city’s thirty-six-billion-dollar unfunded pension liability, but Mark Glennon, founder of the Illinois policy research organization Wirepoints, said that the proposal moves debt from one column to another rather than reducing it, and that the broader fiscal picture facing the city continues to deteriorate across every measurable dimension. Audio here.
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
Full interview and summary linked here.
SIGN UP HERE FOR OUR FREE WIREPOINTS DAILY NEWSLETTER
“Wealthy Illinois residents could see taxes spike” … or they could move out of state and see taxes lower. Let’s see, if I’m wealthy, which situation would be better?
With all of these crazy proposals to gouge the IL taxpayer, you’d think that the IL pols think moving out of state isn’t an option.
I don’t get it.
“Cembalest said the state would have to either increase tax revenues by 25 percent, increase public sector worker contributions by 689 percent or achieve an annual investment return equal to 11.5 percent” Why only focus on one? With all three, Illinois could be a liberal utopia! The state could pay for mobile abortion clinics to just roll up into neighborhoods with a bullhorn that shouts “abortions, abortions, abortion for free, abortions for everyone!” We could have marijuana dispensaries from vending machines in gas stations and public restrooms. My newest idea is the ‘homeless’ tax. Everyone has to take a homeless… Read more »